Plans for the future of ABN AMRO and ASR

ABN AMRO can be returned to the private sector in due course. The government will aim to maximise the revenue generated by the sale. Acting on a proposal by Minister of Finance Jeroen Dijsselbloem,  the government decided in principle that flotation is the best option if the following conditions are met: the financial sector must be sufficiently stable, there must be sufficient market interest, and the business must be ready for such a step. The government will make a fresh assessment of whether these conditions have been satisfied in a year’s time. As far as ASR is concerned, the government will opt for either flotation or a private sale.

‘Banks play an important role in society,’ said Mr Dijsselbloem. ‘The envisaged flotation of ABN AMRO and ASR will promote competition in the financial sector. That’s good news for consumers, especially in the long term. The flotations are in line with the vision paper on the banking sector which was presented today. Banks must contribute to the effective functioning of the Dutch economy. They can do this best if they stand on their own two feet.’

In the coming months, ABN AMRO and ASR, which were rescued by the state in 2008, will have to prepare for flotation. This is a ‘no regret’ measure which will help the bank take stock of its operations and does not anticipate the decision on whether or not to float the bank. The bank and the insurance firm must both further increase their profitability and prepare their internal organisation for a listing on the stock exchange. Both need time to do this. ABN AMRO needs at least a year, and ASR at least six months. At the end of that period, a reassessment will be made of the stability of the financial sector, market interest and progress made by ABN AMRO and ASR. Only then will a final decision be made as to whether flotation is opportune. If a decision is made to go ahead with the sale, the practical preparations will take at least another four to six months.

According to current estimates, ABN AMRO’s value in a flotation could rise to some €15 billion (core capital as established by the regulator). To date, the state has invested €21.66 billion in the business. ASR’s value is estimated at between €2.15 billion and €2.3 billion. So far the state has spent €3.65 billion on ASR. Both valuations are snapshots.

No concrete plans have yet been made with regard to SNS. The possibilities for a sale of SNS REAAL depend on the European Commission’s decision on the restructuring plan.